Problem $5-45($Algo$)$ Volume$-$Based Costing versus ABC $[$LO $5-1,5-3,5-5]$

$[$The following information applies to the questions displayed below.$]$

ADA Pharmaceutical Company produces three drugs$-$Diomycin, Homycin, and Addolin$-$belonging to the analgesic $($painkiller$)$ family of medication. Since its inception four years ago, ADA has used a direct labor hour$-$based system to assign manufacturing overhead costs to products.

Eme Weissman, the president of ADA Pharmaceutical, has just read about activity$-$based costing in a trade journal. With some curiosity and interest, she asked her financial controller, Takedo Simon, to examine differences in product costs between the firm's current costing and activity$-$based costing systems.

ADA has the following budget information for the year:

$\backslash$table$[[,$Diomycin,Homycin,Addolin$],[$Cost of direct materials,$$208,000,$$$268,000,$$$261,000$

Part $1($Algo$)$

Required:

Use the firm's current direct labor hour$-$based costing system to calculate the unit cost of each product.

Use the activity$-$based costing system to calculate the unit cost of each product.

Complete this question by entering your answers in the tabs below.

Required $1$

Use the activity$-$based costing system to calculate the unit cost of each product.

Note: Round intermediate calculations to $2$ decimal places. Round "Cost per capsule" to $2$ decimal places.

$\backslash$table$[[,$Diomycin,Homycin,Addolin$],[$Direct Materials,$$,208,000\mathrm{.}00,$$$,268,000\mathrm{.}00,$$$,261,000\mathrm{.}00$

Problem $5-45($Algo$)$ Volume$-$Based Costing versus ABC $[$LO $5-1,5-3,5-5]$

$[$The following information applies to the questions displayed below.$]$

ADA Pharmaceutical Company produces three drugs$-$Diomycin, Homycin, and Addolin$-$belonging to the analgesic $($painkiller$)$ family of medication. Since its inception four years ago, ADA has used a direct labor hour$-$based system to assign manufacturing overhead costs to products.

Eme Weissman, the president of ADA Pharmaceutical, has just read about activity$-$based costing in a trade journal. With some curiosity and interest, she asked her financial controller, Takedo Simon, to examine differences in product costs between the firm's current costing and activity$-$based costing systems.

ADA has the following budget information for the year:

$\backslash$table$[[,$Diomycin,Homycin,Addolin$],[$Cost of direct materials,$$208,000,$$$268,000,$$$261,000$